Thompson Aeronautics repairs aircraft engines. The companys Purchasing Department supports its two departments, Defense and Commercial. The Defense division has contracts with the Department of Defense and the Commercial division works primarily with domestic airlines and air freight companies. The cost of the Purchasing Department is $7.60 million annually.

Information on the activity of the Purchasing Department for the last year follows:

	Number of Purchase Orders			Dollar Amount of Purchases
Defense		8,200		$	128,000,000
Commercial		32,800			192,000,000

Required:

a. What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the number of purchase orders? (Do not round intermediate calculations. Enter your answers in thousands of dollars.)

b. What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the dollar amount of the purchases? (Do not round intermediate calculations. Enter your answers in thousands of dollars.)